2013年-CEPS欧洲政策研究中心_Banking_Union_in_sight_five_years_on_2页_98kb

Banking Union in Sight: Five Years On

Core Content

The article discusses the progress and challenges of the European Union's response to the financial crisis, focusing on the development of the Banking Union initiative. It highlights the importance of regulatory harmonisation and supervisory integration in preventing future financial instability and restoring market discipline.

Main Views

• EU's Response to the Financial Crisis:
  The EU's response has been extensive and multifaceted, with significant government interventions to prevent systemic collapse. These include direct state recapitalisation, bad-bank schemes, and state guarantees for bank liabilities and liquidity. The total value of state aid in the EU was estimated at 12.5% of GDP, though the full fiscal cost is yet to be determined.

• State Support and Market Discipline:
  Despite these interventions, state support for the banking sector continues in most EU countries. This has raised concerns about the persistence of the 'too big to fail' perception. The article argues that market discipline must be restored by allowing banks—both large and small—to fail, and by phasing out state guarantees.

• Banking Union Initiative:
  The Banking Union represents a major leap forward in EU financial integration. It includes the Single Supervisory Mechanism (SSM), which is a key step towards a more federal system. However, the full implementation of a federal safety net, particularly in resolution systems and deposit guarantee schemes, remains a challenge.

• Comparison with the US:
  The article draws a comparison between the EU and the US, noting that the latter's federal institutions, such as the FDIC, played a crucial role in stabilising markets during the crisis. For instance, Nevada's GDP decline was only 3.6%, while Ireland's was 17.6%, highlighting the effectiveness of a federal safety net.

• Regulatory Harmonisation:
  The EU has followed the G-20 agenda closely, which has driven much of its regulatory response. However, the implementation of a single rulebook has led to increased complexity and the inclusion of loopholes to accommodate all member states. This has limited the extent of harmonisation, particularly in capital requirements.

• Supervisory Challenges:
  The SSM is a significant step towards a more integrated supervisory framework, but its full impact depends on the governance structure. The article warns against diluting the federal nature of the ECB's supervisory decisions, especially with the current voting system in the Governing Council. Additionally, the lack of voting power for the permanent chairman and managing director in European Supervisory Authorities (ESMA, EBA) is identified as a weakness.

Key Information

• State Aid Cost:

  • Total EU state aid: ~12.5% of GDP
  • Ireland: 29% of GDP for state capital support to three largest banks

• Resolution Systems and Deposit Guarantees:
  These are the main unresolved issues in the Banking Union, and their harmonisation is essential for creating a federal safety net.

• US Federal Institutions:

  • FDIC, Freddie Mac, and Fannie Mae helped stabilise markets, reducing GDP decline in Nevada compared to Ireland.

• CRD IV and Basel III:
  Member states retain important powers in setting capital buffers, which has limited the uniformity of regulatory frameworks.

• SSM Governance:
  The ECB's supervisory board needs to maintain a strong federal structure, avoiding dilution through a voting system that gives six votes to the Executive Board members in the Governing Council.

Conclusion

The financial crisis has driven significant regulatory and supervisory reforms in the EU, including the establishment of the SSM. However, the full realisation of a federal Banking Union remains pending, particularly in the areas of resolution and deposit guarantees. The article underscores the need for continued harmonisation and the restoration of market discipline, drawing lessons from the US model to highlight the potential benefits of a federal safety net.